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on January 1,2021 Kalimutan Mo acquired 30% of the ordinary shares that carry voting rights at a general meeting of shareholders of Sige Sige Lang for ₱300,000. Kalimutan Mo has significant influence over Sige Sige Lang. For the year ended December 31,2021 Sige Sige Lang recognized a profit of ₱400,000.
On December 30,2021 Sige Sige Lang declared and paid a dividend of ₱150,000 for the year 2021. At December 31,2021 the fair value of the investment in Sige Sige Lang is ₱425,000.
Questions:
Case No. 1: Assume there is no published price quotation for Sige Sige Lang and Kalimutan Mo uses the cost model.
1. What amount should be reported by Kalimutan Mo in its statement of comprehensive income?
2. How much is the carrying amount of the investment in associate to be reported by Kalimutan Mo in its statement of financial position as of December 31,2021?
1. Using hypothetical but realistic organizations, present different scenarios that may lead to a deviation from the proper use of the following accounting standards:
1. IAS 16 Property, plant and equipment
2. IAS 40 Investment Property
3. IAS 36 Impairment
4. IAS 37 Provisions, contingent assets and contingent liabilities
5. IAS 2 Inventories
6. IAS 38 Intangible assets
7. IFRS 15 Revenue
8. IFRS 16 Leases
The entity that you create must have a name and actual transactions (with figures). Student groups are encouraged to be as creative and innovative as possible. The accounting standard in each case must first be explained in the groups own words, not as provided in the notes or plagiarised from literature, before a deviation may be discussed.
The example of deviation from the proper use of the standard must include recognition, measurement and de-recognition of the element in a particular case. Total Marks: 40
Give examples of transactions that would have the following effects on the items in a firm’s
financial statements:
a. Increase cash; decrease some other asset.
b. Decrease cash; increase some other asset.
c. Increase an asset; increase a liability.
d. Decrease retained earnings; decrease an asset.
e. Increase an asset other than cash; increase retained earnings.
f. Decrease an asset; decrease a liability
financial statements:
a. Increase cash; decrease some other asset.
b. Decrease cash; increase some other asset.
c. Increase an asset; increase a liability.
d. Decrease retained earnings; decrease an asset.
e. Increase an asset other than cash; increase retained earnings.
f. Decrease an asset; decrease a liability
2. Using hypothetical but realistic organizations, present different scenarios that may lead to a deviation from the proper use of the following accounting standards:
1. IAS 16 Property, plant and equipment
2. IAS 40 Investment Property
3. IAS 36 Impairment
4. IAS 37 Provisions, contingent assets and contingent liabilities
5. IAS 2 Inventories
6. IAS 38 Intangible assets
7. IFRS 15 Revenue
8. IFRS 16 Leases
The entity that you create must have a name and actual transactions (with figures). Student groups are encouraged to be as creative and innovative as possible. The accounting standard in each case must first be explained in the groups own words, not as provided in the notes or plagiarised from literature, before a deviation may be discussed.
The example of deviation from the proper use of the standard must include recognition, measurement and de-recognition of the element in a particular case. Total Marks: 40
How to calculate depreciation if a part of a component is replaced
Inventory systems is an accounting topic prescribed for grade12 in the CAPS document. Prepare:
a) a class test (consisting of short answer questions) and
b) a memorandum for this class test
(30) marks
On January 1,2020 Versace Co. acquired 25% interest in the ordinary shares of Hayaan Mo Sila Inc. for ₱3,000,000 which reflected book value as of the date The Equipment has a remaining life of five years.
2020 2021
Net income ₱1,000,000 ₱1,500,000
Dividend declared 400,000 700,000
Assume the tax rate 30% and the depreciable asset is an ordinary asset (i.e., not subjected to final tax).
Questions:
Case No. 1: On January 3,2020 Versace Company sold an equipment costing ₱600,000 to Hayaan Mo Sila Company for ₱800,000.
1. Investment income 2020
2. Investment 2021
Case No. 2: On January 3,2020 Hayaan Mo Sila Company sold an equipment costing ₱400,000 to Versace Company for ₱600,000.
3.Investment income in 2020
4. Investment income 2021
On January 1,2020, Jhona Co. acquired 25% interest in the ordinary shares of Eldon Inc. for ₱3,000,000 which reflected book value as of the date. The equipment has a remaining life of five years.
2020 2021
Net income ₱1,000,000 ₱1,500,000
Dividend declared 400,000 700,000
Questions:
Case No. 1: On January 3,2020 Jhona Company sold an equipment costing ₱600,000 to Eldon Company for ₱800,000.
1. Investment income 2020
2. Investment 2021
Case No. 2: On January 3,2020 Eldon Company sold an equipment costing ₱400,000 to Jhona Company in 2020.
3.Investment income in 2020
4. Investment income 2021
On January 1,2020, Drenz Co. acquired 25% interest in the ordinary shares of Josiah Inc. for ₱3,000,000 which reflected book value as of that date. Josiah Company reported net income and paid dividends for 2020 and 2021 as follows:
2020 2021
Net income ₱1,000,000 ₱1,500,000
Dividend declared 400,000 700,000
Questions:
Case No. 1: On November 20,2020, Drenz Company sold inventory costing ₱60,000 to Josiah Co. for ₱110,000, 60% of which was still unsold on December 31,2020.
1. Investment income 2020
2. Investment 2021
Case No. 2: On November 20,2020, Josiah company sold inventory costing ₱70,000 to Drenz Co. for 120,000, 60% of which was still unsold on December 31,2020.
3.Investment income in 2020
4. Investment income 2021
